Medical tourism: A long trip continues

Medical tourism is not a new phenomena—in fact it goes back to ancient Greece, where people would flock to temples of gods dedicated to the healing arts. In U.S. history, destinations such as hot springs drew thousands, including President Franklin Roosevelt, who found relief from symptoms associated with polio.

But medical tourism in modern times has centered around two concepts: expertise and affordability. Some centers of excellence, such as Mayo Clinic or Johns Hopkins, draw patients from across the U.S. and other nations, due to their reputation for quality.

On the other hand, some countries and hospitals in other nations have become destination for specific types of care. After an economic crisis in the late ’70s, Thailand’s government invested in medical centers that specialized in plastic surgery and sex change procedures. The country’s decision to focus on a medical need that had growing demand and few practitioners helped it became one of the top destinations for medical tourism. Other countries have followed suit by developing centers that specialize in areas such as orthopedic surgery, dental procedures and gastric surgery.

Price is also a factor in many destination medical centers around the world. According to the Medical Tourism Association, U.S. citizens can save between 50 percent and 80 percent on medical procedures done outside the U.S., which has some of the most expensive health care costs in the world. For example, knee replacement may cost $35,000 in the U.S., but could be done for as little as $6,600 in India.

On the other hand insurance coverage, type of procedure, risk of complications, language barriers—all are factors that may complicate a decision on medical tourism for individual patients. This two-part series will look at the recent history of medical tourism in its first part, followed by a discussion on how brokers and employers are viewing the concept today.

How the ACA changed the playing field

Although traveling to other countries for specialized care was not uncommon before the turn of the century, the early 2000s saw a definite boom in the medical tourism industry. Many start-up companies began offering patients options in various countries for care.

“In 2006, 2007, there seemed to be a flurry of interest around this topic,” says Leigh Turner, PhD, a professor of Bioethics at the University of Minnesota. “There was a proliferation of businesses engaged in promoting this model. It was no longer just individuals making decisions for themselves, there was a whole network of medical tourism companies, which took on the role of helping people to get to their destinations.”

However, at least some of this was driven by the complicated and some might say dysfunctional health care system in the U.S. At the time, a significant number of Americans were unable to obtain insurance coverage due to pre-existing conditions or other exclusions—which limited their care options in this country. Many patients were not impoverished, but if they lacked coverage and had to pay out-of-pocket, the lower-priced options in other countries could be an attractive alternative.

With more patients looking at those options, the future of medical tourism seemed bright. But the passage of the Affordable Care Act in 2010 resulted in a major re-structuring of the insurance landscape. Insurers no longer could drop coverage for patients because of pre-existing conditions. Other exclusions such as lifetime caps were also ended. As a result, the medical tourism option still was attractive for some, but not nearly the necessity it might have been for others.

“In the US, lack of health insurance, or being underinsured, has been a driver of medical tourism,” Turner says. “With passage of ACA, we’ve seen the number of Americans who travel for care dropping off.” However, he noted, it has been difficult to document the changes in demand. “There’s not great quantitative data on US citizens going for medical care in other countries,” Turner notes.

Is direct contracting the future?

With the shift in demand from U.S. patients after the passage of the ACA, some medical tourism companies closed up shop—but the concept has continued to evolve.

Recently, medical tourism has less focus on overseas facilities, and more on centers of excellence in the U.S., with insurers and employers seeking partners in the provider community to help them hold down costs.

According to Renee-Marie Stephano, president of the Medical Tourism Association, her organization started out as a resource for U.S. patients who needed information on medical travel options overseas, but today the association does much of its work with medical centers in this country.

“When we started it was really focused on outbound travel from the US,” she says. “But through the years we’ve developed quite a market for domestic medical travel. It’s always based on the value proposition, but in general it’s easier to convince employees to travel to a different state than to a different country [for care].”

Stephano points out that a higher volume of procedures leads to both lower prices and greater expertise, and that’s true for providers no matter where they are. “US hospitals didn’t always believe they were in the business of medical tourism, although they did have inbound patients from other countries,” she says. “Today, we’re seeing that they feel that they need to proactively build their brand and diversify their income.”

In part two of this story, we’ll look at how employers are working with providers to bundle care and create direct contracting for medical services at destination facilities. The evolution of medical tourism may be keeping patients closer to home, but traveling to find the best health care solution is still a concept that appeals to many.